11th Commerce - Book Back Answers - Chapter 20 - English Medium Gudies

 

 

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Tamil Nadu Board 11th Standard Commerce - Chapter 20: Book Back Answers and Solutions

    This post covers the book back answers and solutions for Chapter 20 – Commerce from the Tamil Nadu State Board 11th Standard Commerce textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

    We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

    By going through this material, you’ll gain a strong understanding of Commerce  Chapter 20 along with the corresponding book back questions and answers (PDF format).

Question Types Covered:

• 1 Mark Questions: Choose the correct answer, Fill in the blanks, Identify the correct statement, Match the following 
• 2 Mark Questions: Answer briefly 
• 3, 4, and 5 Mark Questions: Answer in detail

All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

All the best, Class 11 students! Prepare well and aim for top scores. Thank you!

Chapter 20: INTERNATIONAL FINANCE

I. Choose the correct answer

1. An instrument representing ownership interest in securities of a foreign issuer is called ____
a. an ownership certificate
b. a depositary receipt
c. an ownership receipt
d. None of the above
Answer Key:
b. a depositary receipt
 
2. Issuance of DRs is based on the increase of demand in the
a. International market
b. Local market
c. Existing shareholders
d. All of the above
Answer Key:
a. International market

3. ADRs are issued in
a. Canada
b. China
c. India
d. The USA
Answer Key:
d. The USA

4. Depositary receipts that are traded in an international market other than the United States are called
a. Global Depositary Receipts
b. International Depositary Receipts
c. Open Market Depositary Receipts
d. Special Drawing Rights
Answer Key:
a. Global Depositary Receipts

5. __________ bond is a special type of bond issued in the currency other than the home currency.
a. Government Bonds
b. Foreign Currency Convertible Bond
c. Corporate Bonds
d. Investment Bonds
Answer Key:
b. Foreign Currency Convertible Bond

II. Very Short answer questions

  1. Who are Foreign Institutional Investors?

• FIIs are the investments made by an individual investor or an investment fund, into the financial markets of another nation.
• Organisations like hedge funds, insurance companies, pension funds and mutual funds can be called as institutional investors.

2. What is a Depository Receipt?

• A depository receipt is a negotiable financial instrument issued by a bank to represent a foreign company’s equity shares or securities.
• They are issued to attract a greater amount of investment from other countries.

3. What is a Global Depository Receipt (GDR)?

• GDR is an instrument issued abroad by a company to raise funds in some foreign currencies and is listed and traded on a foreign stock exchange.

4. What is American Depository Receipt (ADR)?

• ADR is a dollar denominated negotiable certificate representing a non-US company in US market which allows the US citizens to invest in overseas securities.

III. Short answer questions

1. Explain the importance of international finance. (any 3)

• It helps in comparing the inflation rates and getting an idea about investing in international debt securities.
• It helps in ascertaining the economic status of the various countries and in judging the foreign market.
• It helps in understanding the basics of international organisations and maintaining the balance among them.

2. What is meant by Foreign Currency Convertible Bonds?

• Foreign currency convertible bond is a special type of bond issued in the currency other than  the home currency.
• In other words, companies issue foreign currency convertible bonds to raise money in foreign currency.

3. Explain any three disadvantages of FDI.
Exploiting Natural Resources:

• The FDI Companies deplete natural resources like water, forest, mines etc.

Heavy Outflow of capital

• Foreign companies are said to take away huge funds in the form of dividend, royalty fees etc.

Not Transferring Technology

• Some foreign enterprises do not transfer the technology to developing countries.

IV. Long answer questions

1. Distinguish between GDR and ADR. (any 5)

     

 

 

 

 

2. State any five features of FCCB. (any 5)

• FCCB is issued by an Indian company in foreign currency.
• These are listed and traded in foreign stock exchange and similar to the debenture.
• It is a convertible debt instrument. It carries interest coupon. It is unsecured.
• It gives its holders the right to convert for a fixed numbers of shares at a predetermined price.
• It can be converted into equity or depository receipt after a certain period.